V olume-related factor s The fr s t t w o k e y fgures, New sales (of con - tr acts) and Net chan g e (of contr act portfolio), relate to the de v elopment of the cus tomer con- tr act portfolio . New sales are newly signed con- tr acts that will increase the monthly fx ed sales. Net chan g e in the cus tomer contr act portfolio refer s to new s t arts (a newly signed contr act that has s t arted) plus increased sales in e xis tin g con - tr acts, less terminated cus tomer contr acts and reduced sales in e xis tin g contr acts. Price chan g es are measured separ ately and added to Net chan g e to determine the period’ s closin g balance of the contr act portfolio . The closin g balance is the tot al v alue of monthly in v oicin g on our monthly fx ed contr acts at the closin g date for the current period. The t able belo w is an e xample illus tr atin g the det ails of the contr act portfolio: V alue % change in opening port f olio Openin g balance 100 + New s t arts 15 + Increases 5 – T erminations -12 – R eductions -4 Net chan g e 4 4 Price chan g e 3 3 Closin g balance 107 7 The thir d k e y fgure , t ak en from the s t atement of income , is T ot al sales , which in addition to con - tr act -based sales, includes short -term assignments. Efcienc y -related factor s The efcienc y -related k e y fgures pro vide mana g - er s with tools to monitor ser vice efcienc y and cos t trends. The fourth and ffth k e y fgures are: Gross mar g in , which is defned as tot al sales less direct e xpenses as a percent a g e of tot al sales, and Indirect e xpenses , which pert ain to the or ganization and include sales and adminis tr ativ e e xpenses (cos ts of br anch, area and re g ional / countr y ofces). Gross income less indirect e xpenses equals oper atin g income before amortization of acquisition-related int an g ible assets and acquisition-related cos ts. When this is e xpressed as a percent a g e of tot al sales, it indicates the Group ’ s oper atin g mar g in, which in Securit as ’ fnancial model, comes before acquisition-related items. Capit al-usa g e-related factor s In g ener al, Securit as ’ oper ations are not capit al- intensiv e . Accounts receiv able tie up the mos t capit al. The sixth k e y fgure is D a ys of sales outs t andin g (DSO). Pa yment terms and efec - tiv e collection procedures are decisiv e in deter - minin g ho w much capit al is tied up in accounts receiv able . These fgures are follo w ed up on an on g oin g basis at all le v els in the or ganization. SECURIT AS ’ M ODEL F OR FINANCIAL K E Y FIGURE S GROUP SECURIT Y SER VICE S M OBILE AND M ONIT ORING V olume-related factor s New sales New sales / New s t arts Gross mar g in on new sales T erminations T erminations Gross mar g in on terminations New / cancelled connections (M onitorin g ) Net chan g e Net chan g e Price chan g e Price chan g e Or ganic sales gro wth Or ganic sales gro wth Or ganic sales gro wth Acquired sales gro wth R eal sales gro wth T ot al sales T ot al sales T ot al sales Efcienc y -related factor s Emplo y ee turno v er Emplo y ee turno v er W a g e cos t increase W a g e cos t increase Prospects visited (M obile) Cos t per sale / or der A v er a g e contr act siz e (M obile) Pa y back time / dur ation Gross mar g in Gross mar g in Indirect e xpenses Indirect e xpenses Oper atin g mar g in Oper atin g mar g in Oper atin g mar g in Income before t ax Earnin g s per share Capit al-usa g e-related factor s D a ys of sales outs t andin g D a ys of sales outs t andin g Oper atin g capit al emplo y ed as % of sales Oper atin g capit al emplo y ed as % of sales Oper atin g capit al emplo y ed as % of sales Cash fo w from oper atin g activities as % of oper atin g income before amortization Cash fo w from oper atin g activities as % of oper atin g income before amortization Cash fo w from oper atin g activities as % of oper atin g income before amortization F ree cash fo w R eturn on capit al emplo y ed R eturn on capit al emplo y ed R eturn on capit al emplo y ed F ree cash fo w in relation to net debt 51 Securit as Annual R eport 2012 G o v ernance and mana g ement M ana g ement and fnancial control